Strengthening Bonds: US and Australia Unite Against China's Rare Earth Dominance

Tue Oct 21 2025 18:02:17 GMT+0300 (Eastern European Summer Time)

In a significant move to counteract China's grip on the rare earths market, the US and Australia have formalized an agreement aimed at expanding critical mineral supplies.

The recent partnership between the US and Australia involves a deal to enhance the supply of rare earths, with an investment of $1 billion aimed at bolstering Australia's mining capabilities. Australian Prime Minister Anthony Albanese emphasized that the agreement would advance projects worth $8.5 billion. This collaboration seeks to reduce reliance on China, which currently dominates the rare earths market.

The US and Australia have signed a deal intended to boost supplies of rare earths and other critical minerals, as the Trump administration looks for ways to counter China's dominance of the market.

Australian Prime Minister Anthony Albanese stated that the deal would support a pipeline of $8.5bn (A$13bn; £6.3bn) ready-to-go projects that would expand his country's mining and processing abilities.

The agreement includes an initial $1bn investment by both countries over the next six months.

Albanese highlighted that this latest agreement takes the partnership to the next level.

On Monday, US President Donald Trump also commented on Australia's multi-billion dollar submarine deal with the US and UK, known as Aukus, declaring it full steam ahead.

China currently controls about 70% of rare earths mining and 90% of processing. US companies, heavily reliant on these materials, face vulnerabilities due to China's restrictions on supplies amidst rising trade tensions.

The announcement led to a surge in shares for Australian rare earths mining companies, with Arafura Rare Earths rising approximately 7.7%.

Albanese noted that the agreement is designed to accelerate investment in various projects, including US investments in processing facilities within Australia.

Both nations have committed to tackling challenges related to pricing, permitting, and reviewing sales in the sector.

The US is also advancing plans to build a 100 tonnes-per-year gallium refinery in Western Australia and is preparing to allocate $2.2bn for critical minerals projects through its Export-Import Bank.

This partnership comes against a backdrop of the US seeking to diminish its reliance on China by investing in domestic capabilities, which have already involved stakes in companies like MP Materials and partnerships with Canada.

The framework released reflects the complex dynamics at play, as both Australia and the US are intertwined with China in terms of raw material processing.